Once again. I try to test where we can make the most out of our money. I tried to look for rates with time deposits with different banks and compare it with the earnings we can get with mutual funds.

With my research, I found out that most banks will give you 1.75% - 3.00% interest depending on how long you intend to place the money in time deposits.

Basing from our given. I already have money on my mutual funds for 1 year which is Php200,000 initial deposit worth of mutual funds. In 1 year, it gained Php15,000 of completely passive income.

Now, if we do some math for the computation of earnings for the time deposit account.

1 Year Time Deposit (3%)

Php200,000 x 0.03 = Php6,000 profit

1 Year Mutual Funds

Php200,000 I earned P15,124.39 (based from the post Mutual Funds vs Savings Account)

Almost 50% difference in profit.

As you can see, Mutual funds still beat Time deposit accounts. But the advantages are even  better. You see, when you invest, you want it to be liquid. Meaning, if you need the money, you’ll be able to pull it out whenever you need it. In time deposits, you won’t be able to touch the money until the time is over. With mutual funds, there is only 90 day holding. And after that, you may take the money or decide to keep it.

I’m not suggesting to place your money in mutual funds if you’re already decided to time deposit. Time deposits are also good as a more diversified way to invest. But of course, there is no risk in time deposits compare to mutual funds. The important thing to note that, investing in mutual funds involves a little risk that is why there is a bigger return.

If you’re young with money to invest, those that have volatile markets are a way to go in investing high risk and high reward investments. Investments like forex trading philippines stock trading. But that’s a different topic. Right now, we want a good and safe investment with little risk and decent rewards - mutual funds.

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